The Swiss asset manager co-manages nearly $800 million with embattled Greensill in a supply chain fund.
GAM's Greensill supply chain finance fund had 725 million Swiss francs ($795 million) in assets at year-end, according to a spokeswoman for the Zurich-based asset manager. Greensill faces potential insolvency after Credit Suisse pulled the plug on $7 billion of funds over concerns of its exposure to Sanjeev Gupta's GFG, as finews.com reported on Monday.
The funds are secured and GAM is observing the Greensill situation closely, a spokeswoman for GAM said on Tuesday. The sudden troubles at Greensill, which as recently as last month was planning an initial public offering for this year, raise uncomfortable memories for the Swiss asset manager: in 2018, it suspended a flagship series of funds linked to the U.K.-based specialist finance house. It has spent the nearly three years since then attempting a comeback.
No «Savior of Steel» Exposure
GAM said the Greensill supply chain finance fund (dubbed GGSCF), managed on GAM's side by Alex McKnight and Mark Pearce, «does not have, and has never had, any exposure to the GFG Alliance in terms of credit risk or client money.» The spokeswoman for GAM didn't comment on whether the asset manager would suspend the fund, as Credit Suisse did.
«The GGSCF is an investment grade-only strategy and its assets are fully insured against default by third party insurers with a minimum credit rating of single-A,» GAM said. «The GGSCF fund is designed to offer qualified investors an alternative to traditional money market funds and cash,» GAM said. It isn't clear what investors want amid the turmoil.
The GAM funds, which buy short-term assets, represents a slightly different investment approach than Credit Suisse pursued with Greensill. The GAM spokeswoman didn't comment on whether an absolute-return fund it quietly revived mid-2019 holds any GFG exposure. A spokesman for Swiss financial regulator Finma didn't comment on GAM.
Jittery Investors?
The GAM-Greensill supply chain finance fund registered in Luxembourg was hit by a withdrawal of 264 million euros ($318.4 million) two days before the third quarter closed, finews.com reported last month. It then won an inflow of almost exactly the same amount later that same week, two days into the fourth quarter.
GAM has a long history of this type of adjustments towards the end of the quarter, primarily because some clients don’t want to disclose such holdings, according to experts. A spokesman for the asset manager didn't comment to finews.com.
